The internet has led to hyper-growth across industries — watching movies or TV series on web streaming is no exception. Over-the-top (OTT) players such as Netflix, Amazon Prime, Shahid and Hotstar have disrupted the market, and our study shows almost 90 per cent of viewers in the UAE watching on-demand content.
They already spend 80 plus minutes a day on OTT, almost the same as on traditional TV. However, on-demand video consumption has been growing at a rapid pace, and it will be no surprise that next year, more time will be spent on OTT than on traditional TV.
To give a comparison of the scale of OTT adoption, consider that an average UAE consumer watches around three movies annually in cinemas while taking 50 plus movies (or their equivalent) on OTT platforms. That is, OTT consumption is already 15 times higher than that at the cinema.
Another key trend related to streaming habits is snacking — nearly 95 per cent of respondents in our study said they prefer to tuck into food while watching. While home meals are popular, other favourites during viewing are healthy snacks, nachos/popcorn, and pizza/burgers. The majority are already open to ordering food online ahead of their streaming appointments at home.
We estimate the OTT-related food service market to become larger than the OTT content market in the UAE. There are no clear leaders in the OTT food service space currently. A meeting of minds
The growing traction of OTT platforms and consumers’ propensity to snack while watching video streaming is likely to open up opportunities for cinema operators, online food delivery players and OTT players. Cinema operators already realise the importance of food services to their business model, which contribute as much as 35 per cent to their revenues.
This is increasing as cinema operators launch new dine-in food concepts. Recognising the importance of the home-snacking market, VOX and Reel’s cinemas have already put their food offerings on online food aggregator platforms such as Zomato, UberEats and Talabat to target the OTT food service demand.
Given such synergies, we expect to see more direct collaboration between them. This is already visible in other markets — for example, in March during the IPL season, Hotstar, a premium streaming platform in India, partnered with Swiggy to allow its consumers to order in their meals.
Taking a cue from this, food delivery players in the Middle East can drive their growth by partnering with OTT platforms and allow their customers to experience a wholesome entertainment experience. Cinema operators and traditional food service operators also have an opportunity to innovate and tap into this market.
Sandeep Ganediwalla and Anuj Kumar are with RedSeer Consulting, Middle East.
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